Death to Bitcoin? BitTorrent reveals plans for rival crypto-currency

Death to Bitcoin?
BitTorrent reveals plans for
rival
crypto-currency

  

The founder of the file-sharing network

revealed the news during an interview on the 'Steal This Show' podcast, in which he calls the current most popular crypto-currency, Bitcoin, "overhyped". Bram Cohen, founder of BitTorrent, has announced plans to introduce his own crypto-currency within the next few months.

Cohen's own take on crypto-currency will not rely on the traditional process of using processing power to generate the currency – so-called "mining" – instead, using the power of pre-existing digital storage. Speaking on the podcast (via), Cohen said: "My proposal isn't really to do something to Bitcoin, it really kind of has to be a new currency." "…I have this plan, a slightly crazy plan, for making something that doesn't have computers burning electricity as part of its mining. "The short of it is what you do instead of computers burning electricity to mine you have storage space that's mining."

Cohen's own crypto-currency would, he said, make use of cloud services and desktop computers with lots of memory to "mine" the currency and minimise the 'waste' caused by using traditional computing power for the same process. The BitTorrent founder says he will be dedicating himself in the "next few months" to developing the currency, after finishing up some other work, saying he plans to work on the project full-time. Cohen also took aim at Bitcoin during his appearance on the podcast, saying he considers it to be "still over-hyped".

He added: "it's getting a lot more media attention than the actual impact that it's having so far… a lot of people get excited about Bitcoin because it's gone up a lot in value and they have made money off it. "I think most of these people barely have any understanding what Bitcoin actually is." Storage-based crypto-currency of the type Cohen envisions already exists, with Burstcoin being one example, but it seems Cohen has plans to develop the concept further. Stay tuned for more in the near future as we're sure the BitTorrent founder's exploits will be gaining some significant attention.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Top 3 Types of Bitcoin Scams

 

Top 3 Types of Bitcoin Scams

TheMerkle Bitcoin Scam Types

 

It is not hard to see the cryptocurrency world has successfully attracted a lot of nefarious individuals looking to scam others. In fact, it appears there are more bitcoin-related scams showing up every single day. As one would expect, there are a few different types of scams that are more prevalent than others. Never change a winning tactic, according to criminals.

3. PONZI SCHEMES

Virtually every platform offering bitcoin investment should be treated with a lot of scrutinies. While there is a way for people to make money with other’s money  – trading altcoins, for example – no one has successfully done so on a large scale. Trading itself is a very risky business, yet it is also the most legitimate way to increase cryptocurrency holdings over time.

Unfortunately, there are quite a few large-scale investment opportunities, all of which will eventually turn into a scam. Ponzi schemes in the bitcoin world will always attract desperate people and shills, and there is quite an abundance of these programs available right now. Never trust any online platform claiming to let you earn money without doing anything.

2. MINING HARDWARE

The Cryptocurrency world is home to some great innovation, especially where mining hardware is concerned. Gone are the days of FPGA mining, as it is all about ASICs right now. There are quite a few companies who claim to manufacture hardware, and most of them will offer pre-sale discounts to anyone investing in that company. It is not surprising a lot of these companies offering pre-sales are complete scams, as most of them do not even have any ASIC research and development lab whatsoever.

One of the more recent scams revolving around bitcoin mining hardware goes by the name of Foxminers. The company provides no evidence of their mining hardware or research. Companies like these often trick people into depositing funds in the hopes of getting a cheaper new bitcoin miner. However, they will continue to delay shipping and eventually run off with the money.

1. CLOUD MINING

Perhaps the biggest industry of bitcoin scams comes in the form of companies claiming to run a cloud mining operation. One of the biggest cryptocurrency cloud mining scams to date goes by the name of HashOcean, a company that successfully paid miners for over a year until they finally disappeared and could no longer maintain paying out users accordingly.

Every cloud mining venture should be looked at very closely, as the number of legitimate companies can be counted on the fingers of one hand. Even then, ensuring a return on investment is virtually impossible due to volatile bitcoin prices and mining difficulty increases. Cloud mining can be somewhat lucrative if one is lucky, yet directly buying the cryptocurrency in question and holding onto it for the same duration as the mining contract will usually generate better returns.

Chris Corey CMO MarketHive

   April 28, 2017

Alan Zibluk – Markethive Founding Member

Mysterium To Build Blockchain-based VPN for Secure, Anonymous Internet Connection

Mysterium To Build Blockchain-based VPN for Secure, Anonymous Internet Connection

 

This is a paid press release, which contains forward-looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality of the press release.

27th April, Zug, Switzerland: Blockchain startup Mysterium Foundation has announced its token crowdsale scheduled for the 30th of May. Mysterium is building a decentralized Virtual Private Network (VPN) that anyone can use to connect securely and anonymously to the internet. The system is also designed so that users who share their spare bandwidth to the network will be able to earn digital tokens in reward. The Mysterium platform will operate via its native MYST token, available through the crowdsale.

Until now the public has had to trust their private data to large centralized VPN providers. Now Mysterium will offer an alternative decentralized peer-to-peer (P2P) network that aims to take back power from big corporations. Mysterium acts as a distributed marketplace for the give and take of VPN services and is backed by secure Ethereum blockchain technology.

Internet privacy is under attack. Last month the U.S. reversed a set of important consumer protection rights allowing Internet Service Providers (ISPs) to track customer activity and sell that data to the highest bidder. According to the Electronic Frontier Foundation customers will now be subject to ‘new and invasive ways to track and deliver targeted ads to customers’ [1]. As a result, the U.S. has seen a huge surge in demand for VPN’s as people seek to restore their privacy. Most users are unaware that they are simply moving their private data from centralized ISP’s into the hands of centralized VPN providers.

Mysterium offers a real alternative – an open source, decentralized and encrypted VPN solution with levels of privacy unmatched by centralized providers.

Mysterium Network is specifically designed to combat this erosion of our privacy at a time when corporations, governments, and other entities are becoming increasingly invasive in their surveillance tactics. The peer-to-peer platform will be completely Open Sourced — so no hidden code that can secretly do something you don’t want it to and no hidden or central servers secretly collecting your data. 
-Robertas Visinskis, Founder, Mysterium Network

The Mysterium platform is designed so that anyone with bandwidth to spare can join the network as a VPN node provider and earn MYST tokens in reward. To enable the system to scale, transactions will be handled through the platform’s own decentralized micropayment system called CORE.

The MYST token pre-sale opens on May 30th at 13:00 UTC. Funds raised will be used to support the development and the launch of the platform.

For more information visit: https://mysterium.network

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

Chris Corey CMO MarketHive.com

By Bitcoin.com -April 28, 2017

Alan Zibluk – Markethive Founding Member

Cryptocurrency Costs Unlikely to Crowd Out Fiat Currencies in Korea.

Cryptocurrency Costs Unlikely to Crowd Out Fiat Currencies in Korea

Cryptocurrency Costs Unlikely to Crowd Out Fiat Currencies in Korea
 

South Korea’s central bank has published a new working paper analyzing a dual-currency regime by pitting cryptocurrencies against traditional fiat currencies.

Penned by economists and academics from the Bank of Korea and Seoul’s Hongik University, the working paper, titled ‘Crowding out in a Dual Currency Regime? Digital versus Fiat Currency’, was published earlier this week.

“We examine the impact of a privately issued digital currency and fiat currency using the simplest framework, with which we may derive the most straightforward implications,” reads the introduction of the paper. “More specifically, we attempt to answer the question of whether digital currency will crowd out fiat currency.”

The authors claim their research employs the ‘simplest model of monetary economics’ to drive these straightforward implications with the minimum number of assumptions. The research considers dual currency regime, one which sees the coexistence of privately-issued digital currencies and fiat currencies issued by the government. Bitcoin is underlined is a notable example of a private digital currency.

Making note of a number of efforts with central banks exploring the possibility of issuing their own digital currencies, the researchers point to the example of the Bank of England which has publicly revealed its effort to do so. Such an attempt “could drastically change our monetary system” the authors write.

According to the researchers, the costs associated with both fiat and digital currencies will see both of them function together with each other’s drawbacks. High costs in using one could inturn spur demand for the other, and vice-versa, allowing both fiat and digital currencies to co-exist. They state:

“High costs of using fiat currency increase the demand for digital currency. Similarly, high costs of using digital currency relative to fiat currency raise the demand for fiat currency. In a world of imperfect currencies with uncertain costs associated with the use of a currency, it is unlikely that the relative costs of using digital currency will be low enough to drive out and accordingly crowd out fiat currency entirely. Our results rather suggest that the threshold of equating the demand for fiat currency with that for digital currency will allow the co-existence of both currencies.”

Fiat currencies have been historically known to decrease continuously, the authors confirm, due to inflation and the factor of new money pumped in to the supply by the central bank, also known as quantitative easing.

Bitcoin, in stark contrast, has a fixed supply which would imply a “deflationary bias”, the authors note.

“This could lead to a situation in which Bitcoin drives out fiat currency as a store of value,” the authors speculate, before quickly adding:

However, security or trust issues – the decentralization of digital currency and the absence of insurance provided by governmental authorities – may prevent digital currency from being used as a store of value. Instead, digital currency may be used as a medium of exchange dominantly.

The authors also point to future research possibilities, such as covering the topic of digital money appreciating due to ever-increasing demand and the possibility of a triple currency regime, one which would see private digital currencies like bitcoin, central bank digital currencies and fiat currencies operate together.

David Ogden
Entrepreneur

Alan Zibluk – Markethive Founding Member

Suddenly, Europe is Starting to Become Bitcoin Haven

Suddenly, Europe is Starting to
Become Bitcoin Haven

  

Suddenly, Europe is Starting to Become Bitcoin Haven

Countries like France, Germany and the UK have already established regulatory frameworks for Bitcoin companies, users and traders. Other European countries have offered their unique regulatory frameworks with clarity, to ensure there exists no conflict between local businesses and regulators due to ambiguous regulations and policies like India. Smaller countries such as Malta, an archipelago in the central Mediterranean between Sicily and the North African coast, have begun to consider Bitcoin as a legitimate currency and revolutionary technology.

Bitcoin and Blockchain included in national strategy

In particular, local publications including Malta Today reported that the country’s prime minister Joseph Muscat announced the approval of a national strategy to promote Bitcoin and Blockchain technology. Muscat said at a conference organized by the financial affairs parliamentary committee:

“This is not just about Bitcoin and I also look forward to seeing Blockchain technology implemented in the Lands Registry and the national health registries. Malta can be a global trail-blazer in this regard. I understand that regulators are wary of this technology but the fact is that it’s coming. We must be on the frontline in embracing this crucial innovation and we cannot just wait for others to take action and copy them. We must be the ones that others copy.”

Although Muscat raised several positive use cases of Bitcoin and Blockchain technology, Muscat specifically addressed the Bitcoin Blockchain’s ability to handle, store and process sensitive data such as lands registry in a secure, immutable and decentralized ecosystem.

Land records

Most recently, Ubitquity, a US-based Blockchain startup, partnered with one of the land records bureaus of Brazil to utilize the Bitcoin Blockchain technology to integrate land records to the public Blockchain of Bitcoin. Such method enables land bureaus and other government organizations to store data within an unalterable ledger. “We are incredibly excited to announce our partnership with the land records bureau, a Cartório de Registro de Imóveis [Real Estate Registry Office] in Brazil. This partnership will help to demonstrate to government municipalities the power and benefits of using Blockchain-powered recordkeeping,” said Ubitquity founder and president Nathan Wosnack.

Malta to become the Silicon Valley of Europe?

The rest of the government, including Labor Minister of Parliament Silvio Schembri, revealed the government’s vision to transform Malta into the Silicon Valley of Europe. The country will focus on the development of innovative technologies such as Bitcoin and Blockchain technology to stay at the forefront of European technological innovation.

Schembri stated:

“We should aim to have the world’s best environment for the development and commercialization of fintech models and disruptive innovation. The government should ensure that Malta has the appropriate regulatory framework, the right tax system and the best infrastructure to support this ambition. With our geographical position and weather conditions, strong financial system, skills base, entrepreneurial spirit and can-do approach, Malta can truly serve as a test-bed for new sectors and foreign firms to test their new technology and products locally.”

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Items We Bought With Bitcoin

Items We Bought With Bitcoin

  

You’ve got to admit that everyone likes to go shopping

once in a while, whether it’s to buy that designer shirt you’ve been eyeing or those nifty gadgets you saw in a catalog the other day. To do this you’ve got to spend money. But what happens if you want to shop with cryptocurrency?Bitcoin is a cryptocurrency that has gained popularity over the years. Here are 9 things you can buy with bitcoin:

Shoes from Iran

Time to go out again. We still have our socks, but maybe we need new shoes? Normally having leather shoes handcrafted for your foot size and shape cost a fortune, but in Iran, with its fine leather and shoe industry, these high quality products are affordable.Interestingly the sanctions against Iran don’t make it illegal to import shoes (unless you are American, maybe). But it does make it impossible to send payments. In this case, we literally have no other option than to pay with Bitcoin.

A trip to North Korea

Ever wanted to visit North Korea? The China-based travel agency Young Pioneer Tours has 9 years of experience of organizing tours to North Korea, and can help you with flights, hotels, visa and a tour guide. It’s difficult to make a wire transfer to China, so Bitcoin is our natural choice of payment.

Kimchi socks

Okay, we get it, Bitcoin is awesome. We constantly want to talk about it, tell others about our trip to North Korea, and how we were able to tweet pictures the entire trip from one of the most heavily locked down countries on earth.But doing so would make us a bit annoying. We head over to South Korean company Kimchi Socks to buy their Bitcoin branded socks. That way, maybe people will notice and ask about Bitcoin themselves? Bitcoin socks, paid with Bitcoin. We are so much fun at parties!

Office Gadgets

So now we have shoes from Iran, been to North Korea and have these stylish new socks. Why put shoes on again? Why not just make your work life a whole lot better with some awesome office gadgets?Gadgets and toys are enjoyed all around the world by people of all age, color and gender. But not everyone has a credit card to pay for it. Bitcoin to the rescue.

A monitor

Quickly after the first game, we realize, we might need a better monitor. There are tons of places online that sell monitors for Bitcoins. Rakuten, Overstock, Dell, Tiger Direct and others.

Tea from Taiwan

Do you know that feeling when you make yourself a coffee while playing a video game, and then you forget you made it and now it’s cold? That happens with tea as well, but cold tea is still delicious. Just put some Ice cubes inside! No idea how to combine ice cubes and Bitcoin, but for the tea, head to Beautiful Taiwan Tea.

An ExpressVPN Subscription

VPNs are meant to protect our privacy and data when we browse the web from a coffee shop or airport Wi-Fi. Many of us live in countries that actively monitor and censor the internet, and a logless VPN protects us.For more privacy, it makes perfect sense to not use your credit card (which is connected to your real name), but instead the pseudonymous currency Bitcoin.

Jewelry

No matter if you want jewelry for yourself or as a gift, Reeds takes Bitcoins and ships to wherever you are.

Karma

At the end of the day, why not donate your Bitcoins to one of over 10,000 charities in the United Kingdom? With Proof of Donation, you'er issued a cryptographic receipt that irrefutably proves you did good. With Bitcoin.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Antbleed: Bitcoin’s Newest New Controversy Explained

Antbleed:
Bitcoin's Newest New
Controversy Explained

A mining chip vulnerability

that could potentially be used to remotely shut off bitcoin mining machines was revealed yesterday – with a fix from the manufacturer following shortly after. Involving controversial mining chip manufacturer Bitmain, the issue is what some are calling a "backdoor" in the code that controls its hardware, offering the company a way to remotely shut off the miners. Since the code, released anonymously last evening, is vulnerable to attackers, the main concern is whether, in a worst-case scenario, it could be misused.

The fear is that bad actors could exploit the vulnerability to switch off bitcoin mining equipment in bulk, and with Bitmain supplying such a large number of machines to the market, the impact could have catastrophic implications for the bitcoin ecosystem. Known as Antbleed (a title bestowed by the website that dramatized its release), the vulnerability is open-source, making it easy to verify. Leading up to the reveal, a group was told about the code feature, with some developers, such as Satoshi Labs CEO Marek Palatinus independently verifying that the backdoor exists and that it can be used to stop Bitmain miners on trigger.

Bitmain quickly responded with a fix that erases this part of its mining firmware. Further, its team claimed that the feature was never finished and that it was intended to help customers recover stolen miners, a past problem for industry firms.

The statement reads:

"We never intended to use this feature on any Antminer without authorization from its owner. This is similar to the remote erase or shutdown feature provided by most famous smartphone manufacturers."

Much of the recent buzz in the community is around whether the so-described "backdoor" could have been used for malicious purposes, for example, to shut off a miner if it wasn’t complying with rules set by Bitmain.

Adding to the confusion is that bitcoin developments have been highly politicized lately, with Bitmain often sitting at the center of bitcoin’s long-standing scaling debate, opposing proposals authored by members of the Bitcoin Core community. For example, the vulnerability reveal follows allegations that the manufacturer was using a secret mining advantage to boost its profits.

In conversation with CoinDesk, Bitcoin Unlimited chief scientist Peter Rizun might have summed up the issue and surrounding atmosphere the best:

"The drama in social media today surrounds the question of whether there exists a security hole that would allow this remote-control feature to be exploited for nefarious purposes."

Code details

Still, it seems that there are other reasons to be concerned about the backdoor. Since it can be exploited by bad actors from outside the company, the mining chips are now viewed as a security risk to the network. Everyone to 11 minutes, according to the open-source patch introduced on July 12th, 2016, the machines send calls back to a Bitmain server.

The idea is that the mining manufacturer can scan for identifying information about the mining chip, including its serial number and IP address. But, arguably the biggest concern is that the code isn't limited to use by certain people or companies, so it can be exploited by any man-in-the-middle or attacks coming from the same DNS server. "Even without Bitmain being malicious, the API is unauthenticated and would allow any MITM, DNS or domain hijack to shut down Antminers globally," the Antbleed website reads, further outlining concerns about the potential for technical or political misuse.

Vulnerability or 'malicious' backdoor?

Whether or not it was intended to be malicious seems to make up the bulk of the surrounding debate, and so far, it seems that sentiment has broken along the lines of the scaling debate. Still, some broke away from so-called party lines. "This was reckless of them to leave the unfinished feature in the code since this represents a major security issue," said Henry Brade, CEO of bitcoin service provider Prasos, a past defender of Bitcoin Core’s scaling proposals.

"However, based on the statement it is not accurate to call 'Antbleed' malicious in nature. It's simply a serious security issue."

F2pool operator Wang Chun further noted that he isn’t particularly worried about miners within his pool falling victim to manipulation by Bitmain. He noted, in conversation with CoinDesk, that it doesn’t seem like the company ever used it to shut down miners. "They have been able to do that for a long time, but they didn't," he said. Guy Corem, former CEO of Israeli mining chip maker Spondoolies-Tech, chalked up the controversy to "incompetence” and "negligence", rather than malicious intent.

"It make sense they wanted to develop such feature and it also make sense they didn't complete it and abandon it," he added. Further, he cited Spondoolies-Tech’s own past issues with stolen mining equipment. Still, some in the community are skeptical of Bitmain’s response. "Denial of many people is unbelievable. 'Antbleed' is not bug or mistake. The purpose of the code is clear; shut down miner on remote flag," Palatinus tweeted.

Public info?

Others have raised concerns about this vulnerability being made public since outsiders can then take advantage of the attack vector. Bitcoin Core contributor Matt Corallo argued that owners of these bitcoin miners needed to know about the potential vulnerability in order to fix it. "The issue is, it's already integrated in a ton of deployed hardware," he said, adding:

"It was reported to Bitmain via that bug report months ago, and their customers need to know to protect their operations from potential [man-in-the-middle attacks]."

The issue was first reported to Bitmain on Github in September 2016. One question is how prevalent the practice is in bitcoin. Secret backdoors seem to be par for the course in the technology world, often drawing security-minded critics as they're uncovered. Do other hardware manufacturers have the same vulnerability? Two mining manufacturers, at least, claim that they don’t.

"Our hardware doesn't [have] such issues, we [don’t] offer remote updates for firmware – it's the customer's decision update them or not,” said blockchain startup Bitfury Group CIO Alex Petrov. "My miner has no ASICBoost or backdoor," Jack Liao, CEO of mining LightningAsic, told CoinDesk. Along with the details about the backdoor, those who detected it released a patch that closes it up with a single line of code.

Mining centralization

Still, there are lingering worries that the vulnerability betrays a weakness in the bitcoin network – namely, it's lack of mining chip makers. No clear data is available about how many miners are running this software, but Bitmain is one the largest chip manufacturers in the space, with bolder estimates suggesting it produces 70% of all mining chips. That the backdoor could be used to impact any of those chips is unsurprisingly alarming to advocates that the network be "decentralized" and open to competition that enables different actors to engage it.

For now, the impact seems to be that Bitmain will take action to look at the rest of its codebase in order to spot other vulnerabilities. "The controversy around this code has brought our attention to improve the design in order to address vulnerabilities that were pointed out by the community recently," its statement reads. Still, others are lamenting the state of the drama and conversation around the issue, noting how quickly it became politicized.

Rizun concluded:

"All-in-all just another day in bitcoin."

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Ripple Signs Up Another 10 Banks As Blockchain-Based Payments Grow

Ripple Signs Up Another 10 Banks As Blockchain-Based Payments Grow

  

Ripple signed up another 10 banks,

including BBVA, penetrating the traditional banking sector in a way other digital currencies have yet to do. Ripple Labs continues to grow its client list with small and more substantial banks, engaging clients in the payment service provider market. In its press release, Ripple lists the banks: MUFG, BBVA, SEB, Akbank, Axis Bank, YES BANK, SBI Remit, Cambridge Global Payments, Star One Credit Union and eZforex.com.

An interesting trend shown in the current list of clients is the addition of new payment service providers (PSPs). It shows that Blockchain related payments are efficiently entering the remittance market. The press release describes the list of newcomers as “…some of the world’s largest banks, innovative payment service providers… More and more customers are turning to Ripple for cross-border payments.”

Adoption Scaling

Ripple CEO Brad Garlinghouse is confident in the technology and views the customer base acceleration logical, stating:

“People know Ripple is the only Blockchain solution for payments that is proven in the real world and it’s driving demand from financial institutions of all kinds and sizes because they want to stay ahead of the curve.”

Certain members are already aiming at commercial implementation, although no timeline has been indicated. “We are very pleased to be working with Ripple to provide new types of payment services to change our customers’ experience using the power of Blockchain technology. To demonstrate our commitment, we are joining the Japan Bank Consortium to collaborate with other Japanese banks to move to the commercial use of Ripple’s global network.” – Hirofumi Aihara, General Manager of Bank of Tokyo-Mitsubishi UFJ

XRP outlook positive

The majority of transactions are cross-border but within the same bank. An expected milestone will be when the banks start making Blockchain transactions happen between themselves and counterparties. XRP experienced a large surge in price and market capitalization as 2017 has brought nothing but good news. Despite a rocky 2016 Ripple Labs seems to be back on track to growth and prosperity, having grown its staff to over 150 and counting. The efficiency in both time and fees means that large scale adoption is a real possibility, while companies like SWIFT are finally taking this seriously.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Americans Skeptical of Bitcoin, Asia Surpasses US, Europe in Fintech Investments

Americans Skeptical of Bitcoin, Asia Surpasses US, Europe in Fintech Investments

  

Americans Skeptical of Bitcoin, Asia Surpasses US, Europe in Fintech Investments

Finder.com has recently conducted a study to examine the current trends in the international money transfer space. Olivia Chow, the company’s Lead Researcher had a chat with Cointelegraph revealing key findings of the study.

34 percent of Americans transfer money overseas

According to data collected by finder.com, 34 percent (or 84.1 mln) of Americans transfer money overseas. That is an estimated $140.1 bln last year alone, more than half amounts for mortgages, student loans and credit card debt.

Another set of data reveals that while the general population seems to be embracing digital wallets for day-to-day transactions (57 percent use a digital wallet more than any other mean), 80 percent of all money transferred overseas is still done in person using cash. This is topped with a figure of 96 percent representing those who are unhappy with the level of service they receive. Finder.com launched an in-depth research to identify the reasons behind dissatisfaction with money transfer services, as well as to understand why the in-person approach is still favoured when it comes to international money transfers.

Chow explained the methodology used:

“Because we are an online company, we focused on Money Transfer Operators (MTOs) — non-bank institutions that send global payments — that have web applications and allows for transfers to be completed entirely online. We spent three months sending live transfers to France and Mexico, generating quotes on 2,430 transactions, conducting usability research with 39 participants from usertesting.com and site testing to verify 585 data points collected from provider websites.”

Six most important factors in money transfer

Based on users’ money transfer concerns and needs, finder.com has developed the six most important factors when transferring money. These included exchange rates, the speed of transfer, user experience, trustworthiness, convenience and novelty of the product. These six factors corresponded to six award categories. The study demonstrated that the average score for best user experience was the highest, while the average score for Most Convenient and Most Trustworthy was lowest.

Chow explained:

“The high UX scores is a departure from most banking sectors but this is because we only focused on Money Transfer Operators (MTOs) who are not big banks. They specialize in one area in banking leading to a better user experience both because of this area of focus and because the need to optimize for the user is required to meet margins.”

According to the study findings, industry veterans do not have the highest online country and territory coverage, although, as Chow says, they would if cash pick-up payments (not bank accounts) were included in the study.

She shared:

“For instance, SmallWorld had the highest coverage with 83 countries and territories, but that’s less than half of the world’s 195+ countries and territories. TransferWise and WorldRemit came in second with 74 countries and territories. Western Union had 59 and Paypal 38. The bottleneck here are the specific regulations between different countries. Altcoins could prove a possible accelerator in this adoption. The unbanked recipients also make moving away from cash slow, offering another opportunity for cryptocurrencies.”

An Analysis also revealed the lack of transparency with most of the providers of money transfer services. Thus, two in five providers (40 percent) didn’t transfer funds within the promised delivery time. 31 percent of providers tested did not have successful transfers, they used wire transfers or forced customers to load funds onto a digital wallet before being able to transfer. 31 percent forced customers to provide their personal details before offering an online quote.

As stated by Chow, a perception of trust is a two-way street – people who receive payments must be comfortable with the way they receive. Given all this, what are the chances cryptocurrencies will offer a solution for Americans willing to transact instantly and trustfully?

Americans are skeptical about cryptocurrencies

Describing general habits and preferences of Americans when it comes to money transfers, Chow points out that the biggest determining factor to which service to use is what is convenient to use for those receiving the money. As a result, digital wallets have taken off in the US – the Venmos, Facebook Messenger, and Google Pay. These apps are even marketed as social tools which make it easier to split a dinner bill, for example.

Chow continues:

“However, when it comes to international money transfers, the recipients are often less savvy and possibly without bank accounts. As a result, the resistance for digital adoption is much greater leading to international money transfers from the US still largely being conducted in cash.”

While there is certainly a niche which can be occupied by cryptocurrencies, Chow says that in the US, cryptocurrencies are met with some degree of scepticism among the general public. She believes there are at least two reasons for that.

Is Bitcoin going to overturn the current financial system?

According to Chow, the US economic system is relatively stable. Although the Great Depression was painful for many Americans and “too big to fail” was the supposed harbinger for Satoshi Nakamoto’s invention, the day-to-day relationship with money remained constant.

Chow says:

“The bank didn’t run, people weren’t concerned that their greenbacks suddenly weren’t going to be worth anything, and your ATMs, online banking, and other daily banking mechanisms continued to operate. Ultimately, the need for an alternative currency is not dire.”

At the same time, in many developing countries where the national currency sometimes lacks stability and the government is corrupted. Interest in cryptocurrencies seem to increase as a result of greater volatility and weakness of the fiat. The Indian cash crisis is a perfect example of when Bitcoin volumes have soared.

The second reason for general public’s scepticism towards Bitcoin, according to Chow, is the binary thinking Americans have developed:

“Is Bitcoin going to overturn the current financial system or not? There seems to be a narrative that if it doesn’t do that then it’s a total failure. But if it can buoy economies during a financial crisis and provide an alternative, I think that is certainly filling a need today.”

Indeed, it is still unclear whether this decentralised currency experiment will succeed or just collapse – only time will tell. So far cryptocurrencies do seem to be addressing a growing need for an alternative to the mainstream markets when the latter are in peril.

Why national altcoins failed

Speaking of the instability of national currencies, recently we have witnessed an emergence of a new generation of cryptocurrencies focusing on building money system to solve problems of a specific country (Auroracoin, Scotcoin, Gaelcoin, etc.). While many critics were saying that these initiatives are not able to overturn traditional finance and settlement systems, there was a significant share of supporters.

Chow shared her opinion:

“I think it’s fair to say that those specific national altcoin initiatives have peaked and were unsuccessful. A lot of them rose in critique of limitations and failures of their own currency, but why create a cryptocurrency based on a nation state? When the whole idea is to decentralize and create fewer boundaries between transactions? At the same time, these were largely popular in 2014 when Bitcoin had thought to have failed. So, experimenting with different new cryptocurrencies could have made sense to alleviate the problems of the mainstream economy.”

Today Bitcoin is showing strength with an overall uptrend leading those in volatile markets to opt into Bitcoin, rather than create an entirely new currency. Besides, money transfer services are even taking advantage of the cheaper exchange rates offered by Bitcoin’s separate market. As Chow says, still sometimes the rates are worse, but it’s always good to have alternatives.

Crypto and fiat can’t be compared

Cryptocurrency market is definitely maturing, which is demonstrated by the increasing cryptocurrency market cap. Last year, Bitcoin even managed to outperform many traditional currencies raising hopes that digital currencies are indeed the future of money.

Chow commented:

“I think we need to define “outperform.” How much a currency is worth is dependent on what the cost of goods it can buy. That is still limited and difficult to measure when it comes to Bitcoin — especially legally. Strictly based on market cap and price, yes, Bitcoin more than doubled last year. But until Bitcoin is accepted more widely as payment (which it is starting to) I think it’s unfair to compare them with fiat currencies.

Fintech is prioritized: lessons from Asia

Cointelegraph was interested to know Chow’s opinion on the fintech boom in Asia, and particularly in China. Last year Asia managed to surpass the US and Europe in terms investment volume in fintech industry reaching $1.2 bln versus $900 mln in the US and $200 mln in Europe.

Chow says:

“Indeed, Asia surpassed the US and Europe in venture capital but the year-end investments ended up being much larger in the four and five billions for each – higher in you include other sources of investment. Although Asia surpassed the US in total investment, Asia made fewer deals. This is not necessarily bad but reflects how much more unified their strategy appears to be — investing in fewer companies but more heavily.”

Chow recalls that one of the biggest investments last year was into Ant Financials, the payment arm of Alibaba group. They recently just bought Moneygram, and Chow says it will be interesting to watch:

“They seem to historically be more focused on cash payments but this could dramatically change by this time next year. Furthermore, Alibaba Group’s CEO Jack Ma has been quite vocal about his belief that businesses need to invest in the infrastructure of their own countries.”

After all, it seems in today’s increasingly digital and global market, fintech is being made a priority.

Chuck Reynolds
Contributor

 

Alan Zibluk – Markethive Founding Member

SEC Approves Petition to Review Bitcoin ETF Rejection

SEC Approves Petition to
Review Bitcoin ETF Rejection

It looks like the bitcoin community can still hope

to see a Bitcoin ETF on a major exchange in the near future. Albeit the SEC rejected this proposal back in march of 2017, the Bats exchange filed a petition for review, which has been granted. This is an interesting development, to say the least, and one that may change the future of bitcoin altogether.

SEC Will Review Winklevoss Bitcoin ETF Proposal

It is safe to say a lot of people were disappointed when the SEC rejected the Winklevoss Bitcoin ETF proposal a few weeks ago. There was a lot of excitement surrounding the decision before it was made public, yet things did not work out in the end. However, the Bats exchange, which will list the Bitcoin ETF, is not ready to give up just yet. In fact, they filed a petition for review of the SEC’s initial decision. What this means is how everyone can weigh in on the concept of a Bitcoin ETF rule change proposal until May 15th. Written statements can be sent to either support or oppose the Bitcoin ETF proposal altogether. Do keep in mind the final decision still lies with the SEC. The proposal was initially rejected due to a lack of regulation for bitcoin, and very little has changed since that time.

At the same time, the SEC could have rejected the petition to review the initial verdict. For some reason, they did not do so, which may indicate there is still a chance of them overturning the initial ruling. If that were to happen, the SEC will effectively legitimise bitcoin as a product for institutional investors. Moreover, this could have a significant impact on the overall Bitcoin market cap, which currently sits around the US$20.8bn mark. That being said, everyone can appeal a decision by the SEC, regardless of whether it is positive or negative. What the Bats exchange is doing is not as unusual as some people may think. Having a review petition approved does not necessarily increase future approval chances either, though. Either way, it is an intriguing development for people who still have high hopes for a Bitcoin ETF, even though it won’t mean much if the final verdict remains the same in the end.

There have been a few incidents in which an initial SEC decision has been overturned, although they are far more of an exception than a rule. The only way to successfully achieve such a feat would come in the form of producing new facts to overcome initial objections. In the ETF industry, there has seemingly been no record of a rejection being overturned by the SEC to date. Trends are designed to be broken, but the Bitcoin ETF will have a very steep road ahead, to say the least.

At this point in time, it is highly unlikely the SEC will change its mind  Then again, we won’t know for sure until they publicly issue the new verdict after May 15th. Depending on what information is collected between now and then, things may turn around for the bitcoin ETF after all. For now, there is a reason for reserved optimism, but no one should get ahead of themselves until the new verdict is in.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member